Massachusetts Paid Family and Medical Leave: Latest Updates Ahead of January 1, 2021, Effective Date

The Massachusetts Department of Family and Medical Leave (DFML) updated its “Notice of Benefits” workplace poster regarding the state’s requirements under the Paid Family and Medical Leave (PFML) Act on November 17, 2020.

The DFML states on its website that “EMPLOYERS MUST TAKE ACTION” (emphasis in original) by registering a “leave administrator,” and thereby creating an Employer Account, in order to receive DFML notices showing when employees have started and submitted applications for leave under the PFML Act and when their applications have received determinations.

Just as the whirlwind of 2020 winds down, Massachusetts employers are preparing for what is perhaps the most significant legislative update for worker leave in the past five years. On January 1, 2021, the Massachusetts Paid Family and Medical Leave Act (PFML) will begin providing benefits to eligible workers for qualifying reasons. As the effective date approaches, employers may want to be aware of their obligations under the law and the latest guidance issued by the DFML. The DFML will continue to issue guidance as the effective date approaches. Here is an overview of this new leave program along with recent updates and answers to frequently asked questions.

Overview of the Massachusetts PFML Program and Eligibility

The PFML created a state-run program for providing paid leave benefits to (1) all eligible Massachusetts W-2 employees (whether full-time, part-time, or seasonal) and (2) some 1099-MISC workers. The program is funded through monetary contributions from both workers and employers (or through approved employer private plans that provide equal or greater benefits). It provides workers with up to 12 weeks of job-protected paid family leave, up to 20 weeks of job-protected paid medical leave, or up to 26 weeks of combined family and medical leave in a benefit year. Effective July 1, 2021, covered individuals may take up to 12 weeks of paid family leave to care for family members who have serious health conditions.

Workers may be eligible if they are Massachusetts employees, contractors who receive 1099-MISC tax forms (but are not independent contractors as defined by Massachusetts unemployment law), or if they are former employees who have been unemployed for 26 weeks or fewer. Eligibility is not based on the size of an employer or length of service with a particular employer, unlike under the federal Family and Medical Leave Act (FMLA). PFML-qualifying reasons, however, are substantially similar (but not identical) to qualifying reasons for leave under the FMLA.

For employees to be eligible to receive paid benefits, they must have earned a threshold amount (adjusted annually, but currently $5,100) “during the last 4 completed calendar quarters” from Massachusetts employers (earnings may be aggregated from different employers), earned “[a]t least 30 times more than” the PFML benefit amounts for which they would be eligible each week, and they must take leave for qualifying reasons under the law. For 1099-MISC workers who perform services for a business that does not cover contractors for PFML because 1099-MISC workers make up less than 50 percent of the business’s workforce, such 1099-MISC workers can choose to opt in to the PFML program.

PFML Contributions

The overall PFML program is funded through a combination of contributions from covered individuals and employers. Employers are responsible for remitting contributions to the DFML on behalf of their covered individuals. While larger employers (25 or more covered individuals) must pay a share of the contributions, smaller employers (fewer than 25 covered individuals) are not required to pay an employer share of contributions. 1099-MISC workers must pay the full contribution rate for both family and medical leave. All employers with covered individuals, however, must still remit payment to the DFML on behalf of their covered individuals. Employers are required to remit contributions to the DFML on a quarterly basis if participating directly in the state program. The failure of an employer to make contributions or properly assess the allowable deductions from workers may result in monetary penalties against the employer.

Employer Notice Requirements

Employers are required to provide notice to covered individuals of their rights and obligations under the law.

Employers must display the PFML “Notice of Benefits” poster in a conspicuous area in their workplaces. (Note that given the ongoing pandemic and the resulting shift to remote work in some businesses, employers may consider sending the poster directly to workers.)

Additionally, there are four main notices that must be provided to workers, as applicable, based on the number of covered individuals in an employer’s workforce, including the following:

• Employer notice to employees (workforce of 25 or more covered individuals)
• Employer notice to employees (workforce of fewer than 25 covered individuals)
• Employer notice to self-employed individuals (workforce of 25 or more covered individuals)
• Employer notice to self-employed individuals (workforce of fewer than 25 covered individuals)

Failure to provide notices may result in penalties. The DFML advises that employers that have not notified their existing workers should do so immediately.

Exempt Private Plans

Massachusetts employers that offer a private plan with paid leave benefits that are equal to or more generous than those provided under the PFML program may request exemption from remitting contributions to the DFML. Exemptions may be obtained for remitting contributions for family leave, medical leave, or both. Exemptions must be renewed annually.

Two types of private plans can qualify for exemptions:

• A self-insured plan funded by an employer
• A purchased private plan offered by an insurance carrier licensed by the Massachusetts Division of Insurance

Employers interested in obtaining an exemption must submit an application through MassTaxConnect, the online portal of the Massachusetts Department of Revenue. The DFML accepts applications for exemptions on a rolling basis, but the exemption will not be applicable unless approved in the quarter prior to the quarter that the exemption is intended to go into effect.

The failure of an employer to maintain a private plan approved by the DFML or that has its approval withdrawn by the DFML may be subject to monetary penalties.

Timeline

Currently, the upcoming deadlines are:

December 2020

Pending the rollout of the DFML’s online system, the DFML has advised that covered individuals can begin to apply for leave to bond with a child beginning in December 2020. (The DFML has indicated that these applications would be limited to those individuals who have already had a child, adopted a child, or had a foster child placed in 2020.) The actual leave for bonding with a child may not be taken until 2021. Applications for leave for other qualifying reasons under the law cannot begin until January 1, 2021.

January 1, 2021

Most benefits will become available, including paid medical leave to manage one’s own serious health condition, paid family leave to manage family affairs while a family member is on active duty overseas, paid family leave to care for a family member who is a covered military service member, and paid family leave to bond with a child newly born, adopted, or placed in foster care.

July 1, 2021

Paid family leave benefits to care for a family member with a serious health condition will become available.

Final Regulations

The DFML’s final regulations related to the PFML went into effect on July 24, 2020. The DFML continues to publish guidance further clarifying the interpretation of these guidelines.

Logistics of Applying for Leave

As the January 1, 2021, effective date quickly approaches, the DFML has released new guidance and clarification regarding the logistics of applying for leave.

On December 8, 2020, the DFML issued a press release “reminding employers to register a ‘Leave Administrator’” on the DFML’s website; doing so will create an Employer Account. Once created, the Employer Account will allow the leave administrator to review, confirm the accuracy of, and provide details on employee applications for paid leave benefits. Through the Employer Account, registered leave administrators will receive DFML notices showing “when employees have started, submitted and received a determination on applications for paid leave.”

Pending technical capabilities, employees may also begin to create online accounts to apply for leave in December 2020.

The DFML has provided a plain-language timeline explaining how the application process will work and about how long it will take.

Certification of a Serious Health Condition Form

A worker applying for certain types of leave must provide the DFML with a Certification of a Serious Health Condition form. The form is not required for parental leave to bond with a child or military active duty leave to manage family affairs when a family member is in the armed forces. The form contains a section for the worker to fill out, and then a section for healthcare providers (as defined by the PFML) to fill out. The worker must upload this form to his or her paid leave account once the form is completed.

Answers to Frequently Asked Questions

Over the past several weeks, the DFML has issued new guidance by email, through the DFML’s website, and by way of the DFML director’s verbal updates during public webinar appearances. Below are a few of the most frequently asked questions by employers and the answers provided by the DFML and its director. (Note that it is possible that the DFML may release additional guidance that could impact the answers to the questions below.)

Question 1. “Do private disability policies that are purchased separately by the employee, including through voluntary worksite benefits, cause the employee to have a reduction in DFML benefits?”

A1. No.

Q2. Can an employee “top off” PFML benefits by using accrued paid time off from their employer?

A2. No.

Q3. “Can an employer with a private plan exemption allow their employees to supplement their private plan exemption benefit amount with accrued paid leave?”

A3. Yes.

Q4. Would an employee with a COVID-19-positive test who is asymptomatic and who has been instructed to quarantine be considered to have a serious health condition for purposes of PFML?

A4. This is dependent on what is filled out in the Certification of a Serious Health Condition form. The existence of a positive test is not necessarily enough, by itself, to establish a serious health condition for PFML purposes. As with any other medical condition, the DFML would need the healthcare provider form to be filled out and signed by the provider. Additionally, if a family member had COVID-19, the allowance to care for them would depend on the healthcare provider form along with the fact that leave to take care of a family member will not be available until July 1, 2021.

Q5. For the initial seven-day waiting period under the PFML during which no benefits are paid, is that time eventually paid by the state after the state approves benefits and the employee is on leave, or is the employee never compensated for that seven-day waiting period?

A5. No, it is not going to be compensated by the DFML. An employee can choose to use their own accrued paid leave during that waiting period, but the employer cannot compel the employee to do so.

In addition to the informal guidance above, the DFML has also indicated that it will be releasing additional guidance on intermittent leave and employer reimbursements.

Staying Informed

The DFML’s website includes links to the DFML’s regulations, notices, and other guidance, as well as a sign-up form for the department’s newsletter.

Ogletree Deakins will continue to monitor and report on developments with respect to the ongoing rollout of the PFML program.

Ogletree Deakins will report on developments related to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.